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(Alliance News) - Pub chain Mitchells & Butlers early Monday confirmed plans for an equity raise to get it through the latest UK lockdown, while the founder of peer JD Wetherspoon called for pubs to be allowed to open at the same time as non-essential shops.
Mitchells & Butlers said it intends to raise GBP350 million by means of an fully underwritten, pre-emptive open offer. The FTSE 250 company had said back at the start of January that it was exploring an equity raise, as none of its pubs have been open since the start of the third national lockdown in England on December 30.
The open offer is supported by the company's major shareholders - Piedmont, Elpida Group and Smoothfield Holding - which collectively hold around 55% of the issued share capital.
Mitchells & Butlers will issue approximately 167 million new ordinary shares at a subscription price of 210 pence per share. The price represents a 36% discount to the closing share price on Friday. It is anticipated that the open offer will be fully underwritten at launch, it said.
In addition, Piedmont, Elpida and Smoothfield have informed Mitchells & Butlers that they have come together and consolidated their holdings under a newly incorporated holding company, Odyzean Group. The move is designed to help address the significant capital needs of Mitchells & Butlers and "provide a clear and consistent framework for their future relationship with the company", it said.
The pub company said looking forward, Odyzean has indicated that it intends to review the composition of the board of directors, which may result in a "reduced level of independent non-executive representation in the future".
"We are pleased to have received the support of our major shareholders and key creditors. Mitchells & Butlers was a high performing business going into the pandemic and this capital raising and refinancing will provide the business with the certainty of funding that it needs in order to emerge in a stronger position to take advantage of its strong property portfolio, well known brands and operational expertise in order to win market share and continue its long-term strategy of deleveraging and driving value creation for shareholders," said Chair Bob Ivell.
Meanwhile, Wetherspoon Chair Tim Martin warned that the pub industry is "on its knees" and needs to reopen to save jobs. He said pubs make a massive contribution to the economy, with Wetherspoon alone paying about GBP10 of tax for every pound of profit it makes.
Martin said Wetherspoon has registered more than 50 million customer visits to its pubs, using the Test & Trace system, without a single outbreak of Covid-19, as defined by the health authorities.
He maintained that hospitality groups have provided the UK government with information that "clearly demonstrates" that pubs and restaurants are Covid-secure environments, following the investment of hundreds of millions of pounds in safety and hygiene measures.
UK Prime Minister Boris Johnson will this week begin considering how restrictions in England may be eased ahead of a statement on February 22 setting out his "road-map" out of lockdown.
The improved prospects for a return to normality in the UK saw the pound take another leg up against the dollar, nearing USD1.39.
Mitchells & Butlers shares were up 0.8% early Monday, while Wetherspoon was up 2.8%.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.8% at 6,639.07
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Hang Seng: Hong Kong market closed for holiday.
Nikkei 225: closed up 1.9% at 30,084.15
DJIA: closed up 27.70 points, or 0.1%, at 31,458.40
S&P 500: closed up 18.45 points, or 0.5%, at 3,934.83
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GBP: up at USD1.3890 (USD1.3847)
EUR: up at USD1.2135 (USD1.2120)
Gold: down at USD1,818.61 per ounce (USD1,828.25)
Oil (Brent): up at USD63.35 a barrel (USD61.53)
(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Monday's Key Economic Events still to come
China Lunar New Year public holiday continues. Financial markets closed.
US Presidents Day holiday. Financial markets closed.
1100 GMT Ireland goods exports and imports
1100 CET EU industrial production
1100 CET EU foreign trade
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Government ministers are to begin reviewing coronavirus lockdown restrictions in England after more than 15 million people across the UK received their first dose of a vaccine. Prime Minister Johnson hailed the achievement – just over two months after the vaccination programme delivered its first jab – as a "significant milestone" in the fight against the disease. Ministers have said they are "on track" to meet the target of getting an offer of a first dose to everyone in the UK in the top four priority groups – including all over 70s – by Monday's deadline. Johnson confirmed on Sunday that it had been met in England after First Minister Mark Drakeford announced on Friday that Wales had reached it. Meanwhile, strict new quarantine rules are coming into force requiring UK nationals returning from 33 "red list" countries to isolate in a government-designated hotel for 10 days in an attempt to prevent new strains of the virus entering the country. The passing of the 15 million vaccinations mark paves the way for the next phase of the the rollout – covering the next five priority groups, including the over 50s – to begin.
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BROKER RATING CHANGES
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BERNSTEIN RAISES RECKITT BENCKISER TO 'MARKET-PERFORM' (UNDERPERFORM)
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JEFFERIES RESUMES N BROWN WITH 'BUY' - TARGET 95 PENCE
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JEFFERIES CUTS CVS GROUP TO 'HOLD' ('BUY') - TARGET 1,770 (1,420) PENCE
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COMPANIES - FTSE 100
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Rolls-Royce confirmed Panos Kakoullis has been appointed as its new chief financial officer, succeeding Stephen Daintith, who is leaving Rolls-Royce to join online grocer Ocado Group. Kakoullis was a partner at 'Big Four' accountancy firm Deloitte. He will take up his new role on May 3 with Daintith to depart on March 19 after the jet engine maker posts its annual results. Rolls-Royce said Deputy CFO Ben Fidler has been named interim CFO for the transition period. Separately, Ocado confirmed that Daintith will start as CFO on March 22. The appointment of Kakoullis was first reported by Sky News on Sunday.
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COMPANIES - FTSE 250
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Fund services provider JTC said it has bought Indos Financial for up to GBP12.5 million. Of this, initial consideration of GBP11 million will be paid as GBP10 million in cash and GBP1 million JTC shares. Indos is a specialist in the provision of depositary, ESG and AML oversight services for alternative investment funds. As of December, client assets under depositary oversight were about USD35 billion.
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COMPANIES - MAIN MARKET AND AIM
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NextEnergy Renewables set out details for its London Main Market listing. It said it is seeking to raise at least GBP300 million via an initial placing, offer for subscription and intermediaries offer, with flexibility to raise up to GBP500 million. The renewable energy investment company will issue 300 million shares at 100 pence each and expects to start trading on March 10.
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An Israeli-founded medical cannabis firm has hailed a "pivotal moment" for the sector as it edges nearer to its float on the London stock exchange. Kanabo Research, which makes vaporisers using a cannabis component, was among a raft of firms competing to become the first cannabis-related business to list in London after city regulators gave a green light last month. Last week, MGC Pharmaceuticals opened for trading in London. David Beckham-backed Cellular Goods also is planning a listing. Kanabo is to make its stock market debut on Tuesday in a listing expected to value the company at GBP23.2 million. The business has raised GBP6 million to fund its growth strategy following the listing. Avihu Tamir, chief executive, told the PA news agency that both retail and institutional investors were clamouring to enter the rapidly growing medical cannabis sector. "We could have secured at least GBP11 million in investment but we had to stop sooner," he said.
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COMPANIES - OTHER UK
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Neil Woodford, the star City fund manager who fell from grace when his Woodford Equity Income Fund was wound up, has apologised for his actions as he announced he will be setting up a new firm. The billion-pound fund was gated in June 2019 after a run of poor results led to an investor exodus. But as Woodford and his team had bought stakes in so many unlisted companies, selling the assets was extremely difficult. It was later wound up and Link Fund Solutions, which has sold off assets from the fund to return cash to investors, started paying out last January. Now, Woodford has broken his silence and told the Sunday Telegraph he did not want events in 2019 to be "the epitaph of my career". His new venture, Woodford Capital Management Partners, is preparing for launch and Woodford said he would not be putting ordinary investors' cash into illiquid start-ups. The Jersey-based fund focused on biotech companies will only raise money from professional investors.
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COMPANIES - GLOBAL
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Nissan Motor is not in discussions with Apple over an autonomous vehicle project, Reuters reported. The Financial Times had reported that iPhone maker Apple had approached the Japanese carmaker over a tie-up, though talks were no longer active. Citing a Nissan spokesperson, Reuters reported that the carmaker is "not in talks with Apple", though it is always open to "exploring collaborations and partnerships". Earlier this month, South Korean automaker Hyundai Motor and its affiliate Kia Motors denied news reports they were in talks with Apple for a joint project to make autonomous vehicles.
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Monday's Shareholder Meetings
CC Japan Income & Growth Trust PLC - GM re bonus issue
Countrywide PLC - GM re merger with Connells
Foresight Solar Fund Ltd - GM re investment policy amendment
Great Western Mining Corp - EGM re replacing Crest with Euroclear Bank
Keras Resources PLC - AGM
Revolution Bars Group PLC - GM re 2020 accounts, remuneration
Spinnaker Opportunities PLC - GM re approving Kanabo Group takeover
Uniphar PLC - EGM re replacing Crest with Euroclear Bank
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By Tom Waite; thomaslwaite@alliancenews.com
Copyright 2021 Alliance News Limited. All Rights Reserved.
